FTC gives rulings in two cases |17 December 2013

The Fair Trading Commission (FTC) has settled competition case (FCA 22) of Agreements; preventing, restricting or distorting competition as per sub-part 2 and 3 of the Fair Competition Act 2009 with regards to anti-competitive provisions of the Franchise Agreement between the Seychelles Trading Company Ltd (STC) and its Franchise outlets.

On October 29, 2012, the Seychelles Trading Company Ltd (STC) applied to the Fair Trading Commission for guidance as stipulated under the Fair Competition Act 2009, Section 14 in relation to the terms and conditions of its Franchise Agreement.

The Commission has concluded through its investigation that certain provisions of the Franchise Agreement were not in line with the Fair Competition Act 2009.

The Seychelles Trading Company Ltd (STC) has subsequently opted into a voluntary undertaking in writing with the Commission pursuant to Section 48 of the Fair Competition Act, 2009 which is opined to satisfactorily address the concerns highlighted in the investigation report.

On November 20, 2013, the board of commissioners endorsed the said undertaking as final settlement of the matter.

As per section 49 (1) of the Fair Competition Act of 2009, the commission shall keep under review the compliance with directions given by the Commission and the performance of undertakings given by an enterprise.

Meanwhile, the Board of Commissioners has pronounced its ruling on the Competition Case (FCA 32); The Fair Trading Commission v/s Eden Island Retail Centre (Seychelles) Ltd and Mason’s Xchange on November 27, 2013.

On June 12, 2013, the Commission received a complaint from JPL Exchange – a Bureau de Change located at Eden Plaza. The complaint pertained to an issue of alleged provision of exclusivity (territorial) to a competitor – in a lease agreement between Eden Island Retail Center (lessor) and Masons Xchange (lessee) which had the object and effect of restricting competition.

Following an interim injunction being granted by the Board of Commissioners on June 13, 2013, the Fair Trading Commission was allowed six weeks to conduct its investigation into the complaint. The matter appeared before the Board of Commissioners on October 2, 2013 for hearing.

After considering all the evidence adduced before it, the Board of Commissioners has determined that Eden Island Retail Centre (Seychelles ) Ltd and Mason’s Xchange were in contravention of the Fair Competition Act 2009, Section 11(1) and Section 11 (2) (b) (c). With regards to count 2 referring to the breach of the Fair Competition Act 2009, Section 12(1), the Board of Commissioners found no evidence to support the allegation.

As per the Fair Competition Act 2009, Section 46 (1) the Board of Commissioners has imposed a fine of R10,000 on each respondent.